The first thing that debtors often ask their bankruptcy attorneys is what property they will be allowed to keep and what they will need to surrender. The property you are permitted to keep is known as “exempt” property.
Chapter 11 and Chapter 13 bankruptcies are debt reorganizations. Chapter 11 is usually used by businesses, but large estates can qualify under Chapter 11. Rather than surrendering your property or business, you can keep it and still continue to operate the business. What changes under bankruptcy is that you can now negotiate new terms for settling your debts.
Only individuals can file under Chapter 13. In these bankruptcies, debtors have three to five years to reduce or eliminate their debts. This allows them to retain their property, which is why many debtors who would otherwise qualify under Chapter 7 choose instead to file under Chapter 13. This is especially true if they possess appreciable assets that will likely be worth much more in the future.
Debtors filing under both Chapter 13 and Chapter 11 then propose payment plans that are designed to leave unsecured creditors in a better financial position than they would otherwise be if the filed a straight bankruptcy under Chapter 7. Legally, this is known as the “Best Interest of Creditors” test.
If all this sounds bewildering or overwhelms you, relax. Take a deep breath. It’s perfectly fine not to understand the finer points of the bankruptcy code, as few non-lawyers do. Your Tampa bankruptcy attorney can address all your concerns and answer your questions. Together, the two of you can thoroughly review your finances and determine the best course of action for you to follow.